Despite the Federal Reserve’s best efforts to reduce inflation, the most recent data indicates that it is still stubbornly high, hanging around 8.20%. The stock market has been very volatile due to inflationary pressures, and discussions about a recession are gaining momentum.
With inflation still weighing on the economy and housing market, many of you have been asking yourself if “should I buy a home now?” or “what if I sell my home now?”
If you are a first-time home buyer or investor you want to be opportunistic. As the Oracle of Omaha, Warren Buffett, always says, “…“[be] fearful when others are greedy, and greedy when others are fearful.”. The inflationary pressures that are impacting the overall economy and the rising mortgage rates are slowly compressing home values. This downward trend will continue as the real estate market decelerates from the run-up from the past 10+ years. Being poised to buy will allow you to take advantage of the old adage: “buy low and sell high.”
CONSIDERATION WHEN BUYING OR INVESTING NOW:
- You think mortgage payment would be less than rent
- You have saved up for a down payment
- You’re pre-approved for a mortgage
Historically, homeownership is a great hedge against those rising costs because you can lock in what’s likely your largest monthly payment (your mortgage) for the duration of your loan. That helps stabilize some of your monthly expenses. James Royal, Senior Wealth Management Reporter at Bankrate, explains: “A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”
Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains what happened to rents in the latest inflation report: “Inflation refuses to budge. In September, consumer prices rose by 8.2%. Rents rose by 7.2%, the highest pace in 40 years.”
If you’re prepared and able to do so, buying a home or investing in real estate can offer enduring stability and a dependable place to live during unpredictable economic times. Reach out to KeyOpp to learn more about how to begin.
The San Francisco real estate market is full of complexities and risks. KeyOpp is here to keep things simple for you and to raise the bar when it comes to deep industry knowledge, local expertise, and a passion for exceptional customer service. We’re a locally focused family-owned business helping you identify and take advantage of Key Opp-ortunities in Real Estate.